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December is Usually a Good Time for Wall Street: 5 Growth Picks
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U.S. equities ended November on a positive note after bouncing back from their 2022 lows registered in October. And with December being traditionally a good month for the stock market, it’s expected that the present market momentum will surely cement a year-end rally.
The Dow has now, in reality, exited a bear market, while the broader S&P 500 and the tech-laden Nasdaq booked a gain of 4.6% and 3.3%, respectively, for the month of November, per Dow Jones Market Data. Particularly, at present, the blue-chip index has soared 20.4% from its recent low on Sep 30, 2022.
The Dow’s record in December, by the way, has been quite impressive. The 30-stock index has given an average return of 1.4% in December, according to the Dow Jones Market Data. Similarly, the S&P 500 and the Nasdaq, on average, had advanced 1.4% and 1.7%, individually, in December.
To top it, stocks have historically scaled upward in the last five trading sessions of December, better known as the Santa Claus Rally. According to CFRA Research, during the said period, along with the first two days of January, the stock market has risen 75% of the time since 1945. Stock Trader’s Almanac added that the S&P 500 had gained 1.3% on average during the Santa Claus Rally since 1969.
However, skeptics may say that seasonal trends do not necessarily predict the future. But U.S. stocks recently gained strength following remarks by Fed Chair Jerome Powell that the central bank intends to reduce the pace of interest rate increase in the near term.
Powell indicated that the Federal Reserve may hike benchmark rates by 50 basis points in its December meeting, less than the slew of 75 basis point increases in recent times.
Powell’s comment came in after inflation showed signs of cooling down in the month of October. Needless to say, stubbornly high inflation had compelled the Fed to remain hawkish for the most part of this year, consequently impacting consumer spending and disrupting economic growth.
At the same time, the Fed’s monetary policy tightening measures did slow down the labor market. After all, job openings in October dipped, which eventually led to Powell signaling smaller rate hikes.
Thus, with Fed’s intention to reduce its aggressive rate-hike campaign along with seasonal tailwinds, the stock market is surely poised to gain momentum further. This calls for investing in fundamentally sound growth stocks.
AMark Precious Metals (AMRK - Free Report) operates as a full-service precious metals trading company offering a wide array of products and services. AMRK has a Zacks Rank #1 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 35.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 7.1%.
Barings BDC (BBDC - Free Report) is an externally managed business development company, which primarily makes debt investments in middle-market companies. BBDC has a Zacks Rank #1 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 16.7%.
Caterpillar (CAT - Free Report) is the world's leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. CAT has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 8.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 27.4%.
Chico's FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older. CHS has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 7.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 127.5%.
J & J Snack Foods (JJSF - Free Report) is an American manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. JJSF has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 76.1%.
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December is Usually a Good Time for Wall Street: 5 Growth Picks
U.S. equities ended November on a positive note after bouncing back from their 2022 lows registered in October. And with December being traditionally a good month for the stock market, it’s expected that the present market momentum will surely cement a year-end rally.
The Dow has now, in reality, exited a bear market, while the broader S&P 500 and the tech-laden Nasdaq booked a gain of 4.6% and 3.3%, respectively, for the month of November, per Dow Jones Market Data. Particularly, at present, the blue-chip index has soared 20.4% from its recent low on Sep 30, 2022.
The Dow’s record in December, by the way, has been quite impressive. The 30-stock index has given an average return of 1.4% in December, according to the Dow Jones Market Data. Similarly, the S&P 500 and the Nasdaq, on average, had advanced 1.4% and 1.7%, individually, in December.
To top it, stocks have historically scaled upward in the last five trading sessions of December, better known as the Santa Claus Rally. According to CFRA Research, during the said period, along with the first two days of January, the stock market has risen 75% of the time since 1945. Stock Trader’s Almanac added that the S&P 500 had gained 1.3% on average during the Santa Claus Rally since 1969.
However, skeptics may say that seasonal trends do not necessarily predict the future. But U.S. stocks recently gained strength following remarks by Fed Chair Jerome Powell that the central bank intends to reduce the pace of interest rate increase in the near term.
Powell indicated that the Federal Reserve may hike benchmark rates by 50 basis points in its December meeting, less than the slew of 75 basis point increases in recent times.
Powell’s comment came in after inflation showed signs of cooling down in the month of October. Needless to say, stubbornly high inflation had compelled the Fed to remain hawkish for the most part of this year, consequently impacting consumer spending and disrupting economic growth.
At the same time, the Fed’s monetary policy tightening measures did slow down the labor market. After all, job openings in October dipped, which eventually led to Powell signaling smaller rate hikes.
Thus, with Fed’s intention to reduce its aggressive rate-hike campaign along with seasonal tailwinds, the stock market is surely poised to gain momentum further. This calls for investing in fundamentally sound growth stocks.
We have highlighted five stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
AMark Precious Metals (AMRK - Free Report) operates as a full-service precious metals trading company offering a wide array of products and services. AMRK has a Zacks Rank #1 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 35.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 7.1%.
Barings BDC (BBDC - Free Report) is an externally managed business development company, which primarily makes debt investments in middle-market companies. BBDC has a Zacks Rank #1 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 16.7%.
Caterpillar (CAT - Free Report) is the world's leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. CAT has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 8.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 27.4%.
Chico's FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older. CHS has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 7.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 127.5%.
J & J Snack Foods (JJSF - Free Report) is an American manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. JJSF has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 76.1%.